According to market research firm Frost & Sullivan (News - Alert), machine to machine (M2M) applications are rapidly rising in today’s connected society, and telecommunication companies are looking forward to exploiting these emerging opportunities. As a result, telcos are investigating ways to diversify their M2M offerings, says Frost & Sullivan’s latest study.
M2M non-connectivity revenue to total M2M revenue in Europe amounted to 3.0 percent in 2010 and 4.2 percent in 2011. The study predicts that it will grow significantly in next few years. At this rate, it is expected to grow to more than 20 percent by 2017.
Presently, according to the Frost & Sullivan report, consumer M2M applications focused on small/portable consumer electronics devices such as e-readers and digital connected photo-frames are the closest to telcos' core capabilities of providing digital lifestyle services. Frost & Sullivan’s senior industry analyst, Yiru Zhong, said, “2012 is expected to be a year when telecom companies will begin developing consumer M2M opportunities in addition to their current enterprise focus. Companies with a strong consumer brand and deep consumer digital offering could most readily capture this approach.”
The research data reveals that though telcos in Europe are currently exploring M2M opportunities in industries like utilities, automotive, security/surveillance and healthcare, they are also seeing market potential in consumer electronics due to wide adoption of smart connected devices. Zhong noted, “In addition, this trend has a long growth path as more smart or connected devices become available in the future.”
The report suggests that telcos can exploit the M2M data collected on consumer usage by integrating into the overall customer analytics. Furthermore, the M2M data will provide a solid foundation for future deployments in a smart-cities context by shaping citizen's digital lifestyle, says the analyst.
By combining consumer M2M applications with emerging contactless payments technology, such as near field communications (NFC), the telcos can further solidify their mobile financial service offerings, asserts the report.
However, as per the report, the telecom companies must address two issues before taking advantage of these upcoming opportunities. First, they will have to upgrade their data analytics capabilities and data warehousing integrations. A second obstacle is a suspicion of big brother society. Europe's sensitivity to data privacy makes it difficult for the public to distinguish between an identified individual and an anonymous group of customer segment with similar characteristics. The report shows that telcos can address this concern by always ensuring customer's choice and consent.
Edited by Jennifer Russell